I just got my tax done but I was sure you could write off certain purchase costs such as bank setup fees, valuations over 3yrs. I read this in a book but can someone confirm writing off purchase costs. I have looked on ATO site but it is a nightmare. Thanks for any help.
Adrian Cahill | AdrianCahill.com Personal Development Expert
http://adriancahill.com/from-investor-to-coach/
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Hi Adrian,
I am no ATO expert, but I do know that you can claim the costs associated with purchasing a property, if and when, you ever SELL it. This is because these costs are considered part of the Capital expense, and can be used to reduce the amount of CGT (Capital Gains Tax) payable by you when tax time comes around!!!
Hope this helps!!!
Cheers,
Jo
Hi Adrian,
‘Borrowing costs’ are spread over five years or the life of the loan, whichever is less. Borrowing costs include loan establishment fees, title search, fees and costs for preparing and filing mortgage documents including broker fees (where applied) and mortgage stamp duty. Valuations and lenders mortgage insurance are also included as borrowing costs.
If the total of these costs is less than $100 then the full amount is immediately deductible.
Acquisition costs include conveyancing costs, advertising expenses and stamp duty are not deductible – rather than come into play when the cost base of the property is being calculated.
I recommend you download a copy of the ATO’s Rental Property Guide 2003-04 version.
Derek
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Thanks Derek,
Sorry Adrian, for some reason, I was thinking about the capital expenditure in purchasing (ie. the conveyancing, stamp duty etc that Derek was referring to) used to calculate the cost base for CGT (if and when) you sell.
Derek is right, the “borrowing costs” is a separate lot of purchasing expenses, associated with the mortgage set up, and as Derek said, are deductible over a number of years.
Cheers,
Jo
thanks guys will look for the
ATO’s Rental Property Guide 2003-04.
I believe your right but for some reason the tax/accountant didnt agree. I had to get her to check certain work deductions which she had wrong so hopefully we can get this fixed. Thanks Derek & MonopolyAdrian Cahill | AdrianCahill.com Personal Development Expert
http://adriancahill.com/from-investor-to-coach/
Email Me | Phone MeHere since 2002, however things have evolved over the years.
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